Building True Loyalty from the Inside Out: The Role of Behavioral Science in Customer Retention

By James Lanyon, EVP Strategy + Innovation and Lauren Murphy, AVP Center for Human Understanding at Material

At Material, we refer to our True Loyalty approach as a retention engine – and it got us thinking. Many loyalty programs function like mechanics, patching up leaky pipelines to keep things moving. There’s nothing inherently wrong with this approach; it keeps the retention “car” moving – it drives transactions.

But there’s only so much even a master mechanic can do for a poorly designed car. To truly perform and win, you need an engineer on the team – someone who understands the physics, aerodynamics and deep-down design.

To retain your best customers, you need someone who understands consumer behavior and the science that delves into human motivations, preferences and actions. Behavioral science is the “engineer” that understands consumers’ inner workings and knows how to build a retention engine that really performs.

Here are three ways to engineer brand loyalty with the help of behavioral science.

1. Decode consumer motivations

Go beyond what consumers are doing to find out why they’re doing it. Behaviors that look the same can be motivated by totally different needs – and needs that appear similar can drive completely different behaviors. Most brands fail to understand those underlying needs and the psychology underpinning them. True Loyalty is built on both transactional and emotional drivers. Understanding the emotional side of the equation requires that you look beneath the clicks, conversions and transactions – uncovering the motivations, habits and psychological drivers impacting those actions.

Material offers a number of ways to help organizations get to the “why” and act on it in real time, so they can effectively center their content, products and experiences in their customers’ lives.

Behavioral Science Consulting

People can be hard to predict; there’s a disconnect between what they say and what they do. What motivates them one day might be irrelevant the next. Understanding consumers’ decisions requires input from a variety of disciplines, from neuroscience and psychology to sociology, behavioral economics and anthropology.

Pulling from research in these and other disciplines, Material has created a uniquely effective approach to understanding consumers – built on six fundamental principles of behavioral science. We develop and deploy frameworks and tools that help predict consumers’ future needs and empower businesses to take a human-first approach to brand strategy.

Dynamic Journey Mapping

Customer journeys are all different, and they’re always changing; most have both online and offline components, often occurring at the same time. To fully understand and better engage with these journeys, brands need more than a static journey map.

Material’s modern approach to mapping journeys is dynamic and interactive; rather than enabling engagement with single points in time, we provide an ongoing system of learning that organizes key persona information and both qualitative and quantitative insights. Our modular mapping tools and processes generate the context required to create more personalized, timely and actionable journeys.

Visualizing journeys in this way is a behavioral science technique that supports the users of your data. When journey data is more digestible and accessible, stakeholders are empowered to discover key connections and recognize pivotal moments within customer journeys.

2. Architect Adaptive Behavioral Systems

Most brands collect behavioral data. Very few know what to do with it. To build real loyalty, you can’t treat data like a static asset that sits in a CRM and waits to be queried; you need to treat it like a living system that actively shapes the customer’s relationship with the brand.

An adaptive behavioral system uses research-driven rules, psychological insights and real-time signals to constantly tune itself – much like a car that adjusts traction in changing road conditions. It transforms raw data into a responsive engine: one that predicts needs, personalizes communication in the moment and evolves as customers evolve.

Material helps organizations build these adaptive systems by integrating three critical layers:

Behavioral Intelligence

The base layer: behavioral intelligence is a deep understanding of how people actually decide – across contexts, mindsets and emotional states. This isn’t a one-off study; it’s an ongoing investigation through a lens that informs everything from messaging to UX to offer design.

Segmentation that Moves

Instead of rigid segments locked in a slide deck, adaptive systems allow segments to flex based on new signals like context, time of day, lifecycle stage or emotional cues. Customers aren’t static; your segmentation shouldn’t be either.

Actionable Experience Blueprints

This is where intelligence turns into impact. Using journey inputs, behavioral indicators and real-time triggers, we help brands create playbooks that guide everything from communication cadences to product prioritization. These blueprints help teams make faster, more confident decisions because the behavioral logic is already baked in.

The result is not a dashboard or a tracker – it’s a living operating system for retention. This system scales, updates easily and bridges the gap between insight and action by giving teams a human-centered framework for designing the next best interaction.

3. Prioritize the Behaviors that Matter Most

Is a customer making their first purchase from you? Their third? Are they back after a period of dormancy? Whatever the situation, you should take a strategic approach to prioritizing consumer behavior and determining which actions matter most. Material uses a cost-benefit analysis approach to identify “big rock” behaviors that drive the most value versus “quick win” behaviors that can be leveraged for immediate, tactical success.

By prioritizing the right moments, you can unlock revenue with precision – turning your behavioral data into a sales intelligence engine. Prioritization can help brands:

• Identify winning territories by knowing where to focus and why.

• Target key areas of influence by blending psychographic and demographic intelligence.

• Improve ROI at every stage of the sales pipeline.

Out of all consumer behaviors, those driven by habit are among the most valuable. High value behaviors are the kind that drive increased spend and basket size in the moment; they can also motivate customers to return and help you build longer term brand connections. Material’s value equation goes beyond traditional metrics to incorporate the moments and contexts that will have the greatest influence on habit and building customer lifetime value.

Keep in mind that, while habit is a powerful driver – it influences about 40% of our daily behaviors – people do change. Consider, for example, the shift to online shopping during the pandemic. What remains, though, are the underlying reasons and motivations that drive these changes. Understanding these is key to engaging with and influencing consumer behavior.

Build a Retention Engine with Material

Cars are complicated; they have a lot of parts, but they’re ultimately understandable if you have a manual handy. Humans, on the other hand, are complex, constantly adapting and changing in ways that can’t be contained in an owner’s manual. By recognizing and embracing that complexity – and employing the right expertise – brands can better connect with the human motivations, habits and emotions that underpin long-term loyalty and retention.

At Material, we have fifty years of proven industry leadership helping brands get closer to their customers and build strategic blueprints aligned with human behavior. If you’re ready to stop trying to patch up your loyalty problems and build a retention engine, reach out. Material can help.